DECEMBER 3, 2021
9 min read
It’s a common opinion that asset management is somewhat similar to the wealth management notion. Simply speaking, this is a method of developing, operating, maintaining, and selling assets with the purpose to receive a positive financial profit. An asset, in its turn, is a resource, an item of property, or anything regarded as having value. It can be owned or controlled by an individual, enterprise, or government. A few examples of what can be considered assets are cash or cash equivalents, Accounts Receivable, inventory, investments, real estate, machinery, vehicles, etc.
When asset owners need advice or guidance with their fund management, they may turn to asset managers. These are financial firms with experts specialising in making significant investment decisions that lead to the client’s portfolio’s growth. The best of them have assets under management (AUM) worth more than $1.5trln. By the way, US asset managers are among the largest in the world. In particular, the New York City-based BlackRock company has a total AUM of around $9.5trln. Vanguard and FMR Corp are also among leaders in America.
Thus, in case you’re planning to fund, it can’t hurt to get professional advice and put yourself in the hands of a good financial service provider. But it’s also as important to study out the subject yourself, learn the trends in investment, and consider the most profitable options. And they’re numerous. Stocks, gold, cybersecurity, artificial intelligence, real estate, and many more. What to choose? DashDevs have prepared a review of the most promising markets, so you can find the best option for your future investment in 2022.
Which Markets Are Recommended for International Investing?
International investing implies investments that are made outside the domestic markets. What are its advantages? It aims to increase the diversification of investor’s portfolios and benefit from the growth of some developing foreign economies. However, there are certain risks:
- the cost is often much higher;
- access to information (especially in English) is limited;
- currency rate changes, which may result in either reducing or increasing your investment return;
- governmental, industrial, and cultural events that influence the investment industry of another country are difficult to understand and predict if you’re a foreigner.
Types of International Investments
International investments are usually divided into 2 main categories:
1. Foreign Portfolio Investment (FPI). These are investments made in securities and other financial assets issued in a foreign country. Such investors don’t actively manage the funds, and they don’t have direct control of what they put money into. They just get a financial rate of return as well as diversifying investment risk through various markets.
2. Foreign Direct Investment (FDI). Similarly, these are investments made by corporations in a foreign economy. But in contrast with FPI, FDI investors can control their funds and manage the assets. FDI is typically a long-term project.
Instruments for International Investments
These are the ways of how you can invest internationally:
1. American Depositary Receipts (ADRs). This is, probably, the most popular instrument for overseas investments. ADRs offer American investors a method to buy stock in foreign corporations that wouldn’t otherwise be available.
2. Global Depository Receipts (GDRs). This way is somewhat similar to ADRs. A depository bank issues shares of foreign organizations in global markets and makes them available to investors within and outside America.
3. Foreign Currency Convertible Bonds (FCCB). An example of FCCB is a Euro bond issued by a US company in the UK. In short, this is a convertible bond issued in a foreign currency.
Markets for International Investing
Now let’s refer to all the variety of markets for investing that look the most promising for the coming 2022 year.
1. Investing in Gold
On the one hand, today, no currency is backed by gold as it was previously. However, the global economy still depends on it. For one, gold mining contributes to economic growth because of job and business opportunities it creates. But that’s not the only thing. Gold attracts foreign investments and brings tax incomes to the countries involved in this resource extraction. Here’s why to invest in gold:
- it’s among the best diversifiers;
- it delivers competitive returns;
- it’s always in demand;
- it provides downside protection.
But how to invest in gold? The most common methods are:
- Physical gold. There are a few ways to buy physical gold. You can do it online on platforms like APMEX or JM Bullion. Usually, the more you purchase, the bigger the discount. Another option is to use eBay to bid on gold bars. Moreover, there are Gold-to-Go ATMs in cities like in Abu Dhabi or Atlantic City.
- Stock in gold miners. You can find best value gold stocks at companies like Sibanye-Stillwater Ltd, Gran Colombia Gold, Torex Gold Resources, or Equinox Gold.
The last thing to consider is when to invest in gold. It’s known that gold has been showing a great performance over the years so it seems like 2022 would be good for gold investing. The price is predicted to be $1,600 per troy ounce.
2. Investing in Electric Vehicles
Today everyone knows what electric vehicles (EVs) are. These are automobiles partially or fully powered on electric power. But people are interested in a much more intriguing question — when will electric vehicles take over? No one can give an exact answer. According to the New York Times, EVs will cover approximately 62% of all sales by 2050. While UBS claims it to be 100% in 2040.
This is going to happen sooner or later anyway, and that’s why electric vehicles are good for investment. They’re simply in demand! What are the best electric car company stocks to consider?
- Tesla. This is, obviously, a leader among car brands worldwide with an estimated value of about $42.6B. Also, their Model 3 is the world’s best-selling car. In 2020, Tesla’s stock price increased by more than 740%. This is a truly impressive number, isn’t it?
- NIO. Why don’t you consider investing in Chinese electric car producer NIO? It’s constantly showing a 400% increase, competing with Tesla. It even managed to undercut Tesla on price because of Chinese government subsidies. So, the investors’ attention is drawn to the NIO company greatly these days.
However, note that not all EV companies are good markets for investing. Take a notorious Nikola, whose founder is known for a skirmish with Elon Musk on Twitter, early pre-orders for its Badger pickup that had to be cancelled, and numerous accusations. Don’t hurry up with conclusions that investment in EV is always good!
3. Investing in Stocks
What does investing in stocks mean? Well, you purchase the stock of a company, in such a way acquiring its ownership share. Does it imply you now can sit next to Elon Musk at Tesla’s shareholder meeting making the most important decisions? Well, no. But in most cases, it means that if you want to, you can vote at those meetings. But this isn’t why investors choose to buy stocks. The main reason, of course, is to earn a return on their investment (ROI). Here’s how you can get it:
- The stock’s value increases. After that, in many cases, investors just sell the stock and get a profit. These are often the fastest investments, according to the specialists’ opinion.
- The stock returns dividends. Approximately every 3 months investors receive payments (dividends obtained out of the company’s revenue). It’s crucial to know that many, but not all stocks pay dividends.
Good news for investors — the average annual stock market return has been approximately 10% for many years. For example, if you invested $1k in stocks about 30 years ago, you’d now have $8.
4. Investing in Electronic Commerce
Electronic Commerce (also called E-commerce or Internet commerce) is the buying and selling of goods and services online. It also involves the exchange of data and the transfer of money. Is investing in it profitable? Of course! Today, online shopping is among the most popular online activities in the whole world. E-retail revenues are forecasted to increase to $5.4trln in 2022 (in comparison, it was $4.28trln in 2020). The reason for such growth is obvious today — the pandemic has made shopping at home a necessity.
Good examples of Internet commerce businesses for your most successful investment are the following:
- Amazon — a worldwide leader in e-commerce. Amazon received over $21bn in net income on $386B of sales in 2020. Today, Amazon has over 506m shares outstanding, and the number continues to grow.
- PayPal Holdings — one of the favourite online payment programmes for millions of buyers. This is proved by the fact that the company recently passed 250M active accounts.
- Etsy — a place where you can buy or sell pieces of art, custom products, vintage, and any kind of handmade goods. This is a market winner with strong competitive advantages, so many experts believe it’s one of the best stocks to buy right now.
Other enterprises to consider for investments are Alibaba Group Holding, GrubHub, Home Depot, Mastercard, Visa, Shopify, and WestRock.
5. Investing in Cybersecurity
Cybersecurity is the protection of internet-connected systems and sensitive information from digital attacks. Similarly to e-commerce, the coming year is a good time for investing in cybersecurity because the cost of stocks rose simply because cloud computing and remote work have become a necessity today. DashDevs have prepared a list of companies with the best cybersecurity stocks for you:
- CrowdStrike Holdings is among the biggest security vendors. The sales are growing and so the revenue goes on rising by almost 95% per year. The company’s stock is definitely a smart buy.
- SentinelOne is a competitor with CrowdStrike Holdings. Its revenue is expected to double in 2022. The company is valued at $10bn. However, some finance experts claim its stock is too costly.
Companies like Okta, Zscaler, Fortinet, and Palo Alto Networks are also recommended for cybersecurity investment.
6. Investment in Artificial Intelligence
Artificial intelligence (AI) is the simulation of human intelligence processes by computers, robots, and other machines. Analysts claim that investment in artificial intelligence is profitable, and suggest the following corporations to buy stocks at:
- Alphabet Inc. This is a company that owns a number of different businesses. The biggest is, of course, Google. Alphabet earned over $65B in the third quarter of 2021 and the income is growing each day.
- Meta Platforms Inc. Known as the Facebook parent company, it already implements AI to its newsfeed and ad algorithms. Even though there are lots of arguments about the company’s values, Meta stock is still well valued.
- DocuSign Inc. The business is specialising in document automation electronic signature. Since its IPO, the stock has returned nearly 600% and holds a market cap just below $55b.
Other companies to invest in artificial intelligence are International Business Machines, Microsoft, Taiwan Semiconductor Manufacturing, NICE Ltd, and ABB Ltd.
7. Real Estate Investments Trusts
What are real estate investment trusts (REITs)? These are organizations that control and finance revenue-generating real estate. They fund different types of real property assets: flat buildings, office centers, retail spaces, warehouses, resorts, and many more. How do they make money? There’s a quite easy business model: REITs lease space and accumulate rent on the real estate. Then the company receives income and pays stockholders their dividends. REITs are total-return investments.
How to make a real estate trust investment? There are a few options:
- Buy REITs (for example, through a broker).
- Invest in a real estate investment group (REIG).
- Use real estate funds (which also helps to get diversification).
Make sure you cooperate with experienced companies that have strong management. And invest in REITs with only high-quality properties. Also, keep in mind that because of the pandemic, not all property types are profitable to invest in. For example, retailing demonstrates the lowest total return in equity at -25%.
What’s Your Best Investment For 2022?
If you’re a newbie, managing investment may seem challenging. There’s a lot to learn and research. Besides, you need to have a keen sense of the pulse of everything happening in the stock world. Only if you figure out all the pitfalls and benefits of investing, can you make money work for you. Don’t hesitate to contact DashDevs to get expert asset management consulting or develop the fintech software product for you! We’re here to help you with any of your requests!